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The College of Liberal Arts (CoLA) at the University of Texas at Austin is being downsized. A report issued by the college from October 2012 announced the goal of reducing full-time faculty from 567 (in 2010) to 491 by 2016-2017 (the number has reportedly gone down even further). The same report also puts forth a goal of reducing the amount of graduate students in CoLA to 1300 primarily through reductions in cohort size [1]. A recent public statement by CoLA states “The College had 1,893 graduate students in 1990. By 2000, the number dropped to 1,572 and by spring 2014 to 1,354. We will continue our effort to reduce our graduate student population in the upcoming years” [2]. In an interview with representatives of the Graduate Student Assembly, the associate Dean of CoLA, Dr. Raizen, maintained that there was no plan to reduce the amount of undergraduate courses taught in CoLA despite the decrease in graduate student TA and AI positions, and in fact, that the amount of undergraduate students might increase, continuing a trend across the University [3].

A few years ago, reduction in cohort size was put forth as the primary mechanism for reducing the amount of graduate students [1]. In an interview with the Daily Texan on tuition increases for graduate students, Dean Raizen stated “…we can’t reduce the number of TAs or AIs. In the absence of additional funding, reduced student cohorts are the only means by which we can increase our student support and remain competitive.” [4]. However, at the end of April of this year (2014), CoLA administrators announced a new innovative policy that would flush out the amount of graduate students in CoLA even quicker- a 6 year time to degree/employment limit. The policy is not just meant for incoming students but for all graduate students currently in CoLA despite contradicting the graduate calendars under which these students entered [5], resulting in frantic work speed ups for some and panic attacks for others. In response graduate students in the department of American Studies and English have signed petitions (the former being unanimous) to CoLA against the policy, and other departments (Philosophy, History, Anthropology, Linguistics, Sociology) are drafting letters [6].

CoLA’s narrative

Administrators at the College of Liberal Arts have constructed a narrative.to justify the sudden introduction of this policy initiative. The combination of overly long time to degree and low stipends puts graduate students in “a precarious financial position that often involves the accumulation of debt and may have life-long adverse consequences” [4]. That is why CoLA plans to use the increase in money from the decrease in positions to increase stipends for (enrolled or incoming?) graduate students. CoLA’s research report from 2012 also points out that this will result in the recruitment of higher quality students [1]. This is the best possible option given the fact that CoLA’s funding has been flat for years and is likely to remain flat. Furthermore shorter time-to-degree is an “important indicator of program quality and student success”, and an important metric in national rankings. CoLA’s efforts to reduce time-to-degree should come as no surprise. In a letter sent in response to a unanimously signed petition from graduate students of American Studies, the Dean of Graduate Studies, Judith Langlois states;

“The College of Liberal Arts [sic] efforts to reduce time-to-degree are consistent with efforts across the University and across academia nationwide. The proposed limits on candidacy and funding are legitimate approaches to encouraging degree completion in an increasingly efficient fashion” [7]

There are a number of problems with this narrative. While it is true that there is a significant national discussion on decreasing time-to-degree, nowhere in the literature on this topic is it recommended that College level administrators should impose strict time-to-degree restrictions on departments. While a recent report (May 2014) put out by the Modern Language Association, argues that time-to-degree could be reduced to an average of five years, the report emphasizes the initiative of departments in achieving this task [8]. There are also a number of other areas where CoLA administration’s new policy suggestion contradicts recommendations of the MLA report- these are reviewed below.

Actually understanding why time-to-degree is so long for CoLA graduate students is presumably important in dealing with the problem. But CoLA administrators have offered no explanation in this regard. We are left to wonder whether the reason is that departments in CoLA are simply misbehaving and need to be put in place by higher administration. When one considers the probable causes of increasing time-to-degree in CoLA, however, it is clear that regarding the well-being and success of graduate students, the policy will exacerbate the problems it purports to address.

Problem 1: More work and less people

The justification ostensibly ignores the fact that graduate student labor as TAs and AIs is important for teaching (not to mention tuition revenue). CoLA somehow expects departments to teach more with less labor while graduate students finish their degrees faster [8]. The “position paper” makes reference to the need to increase stipends by $4,500. There are currently over 800 graduate students employed as teacher’s assistants or assistant instructors and funding for CoLA is currently flat (decreasing when one takes inflation into account). Assuming all of the money from the elimination of graduate student positions will go into stipend increases ($4,500 for each student per year) there would need to be roughly a 24% reduction (to 603) in TA and AI positions in CoLA.

How this labor is going to be made up has not been made clear as there are no plans to decrease the amount of courses in the College. When Dean Raizen was asked about this issue by members of the Graduate Student Assembly, she stated that the amount of undergraduate students in CoLA may actually continue increasing, following University wide trends (as reported by the Daily Texan [9]).

From the Daily Texan, 2013

One of the key reasons why time-to-degree is so long for graduate students is that it is contingent on employment. Obviously if graduate students did not have to teach as much they would be able to finish their degrees faster. However, this problem is not being seriously dealt with by CoLA’s policy initiative as they pretend that stipends amount to free funding not tied to the University’s labor needs nor tuition revenue. In other words, one of the key problems that produces lengthy time-to-degree (graduate student workload), will be exacerbated by the policy.

It is important to keep in mind that despite the fact that the time-to-degree policy will be implemented without exception for the year 2016-2017, there is no such guarantee for the increase in stipends. There has been no announcement of a date when stipends will definitely increase. CoLA announced in 2010 that it would increase graduate student stipends to $20,000 by 2013-2014 but this never materialized [1]. Those students who are most adversely effected by the proposal, those students who came in under a good faith understanding that they had a longer amount of time, are not going to be the beneficiaries of this policy.

Problem 2: Academic placement in a tough “job market”

It is because graduate students face a “tough job market” that time-to-degree is long. The MLA report mentions a “contraction in the job market”. It is important to point out that this the result in a decrease for decently paid tenure track positions and that is not the result of a decrease in the demand for Humanities [11]. Rather, the contraction is more accurately referred to as “supply constraint” imposed by University administrations across the country, resulting in a lower professor per student ratio [12] and a proliferation of low paid adjunct positions [13]. The MLA report states “In 1975 70% of the faculty held full-time positions and well over half held tenure or were on the tenure track; today half of the faculty hold a part-time appointment, and only 29.8% hold tenure or are on the tenure track” [11].

The contraction of the “job market” for tenure track positions is plausibly responsible for an increase in time to degree. If there are fewer academic positions, this pushes up competition between departments to produce increasingly qualified graduate students,which require an increasing amount of time to produce. Many graduate students in the humanities are now not only expected to have produced a book length dissertation, but to have publications upon graduation. Lack of these qualifications leads to decreased likelihood of job placement or decently paid and secure job placement.

As a consequence of the strict time to degree policy academic placement is likely to decline, due to a rushed thesis, and reduced publications upon graduation. It is precisely because graduate students face a harsh labor market that the policy is questionable.

The MLA report emphasizes the importance of this issue stating that colleges and departments have a commitment to increasing employment opportunities; “It is …in the interest of our fields to advocate vigorously for both more tenure-track positions and improved working conditions for non-tenure-track faculty members” [13]. In contrast CoLA is reducing the amount of tenure track positions.

The apparent justification for the 6 year limit policy, that it is being implemented to alleviate the precarious financial situation of graduate students, is highly disingenuous as the policy initiative does not address one of the main causes of graduate student financial burdens. CoLA administrators are implementing two policies that worsen the problem they purport to address. The policy will make academic placement more difficult by reducing the qualifications of graduate students upon graduation, and CoLA administrators are, at the same time, following a national trend to reduce opportunities for academic placement in general.

Deans should advocate not capitulate

The main issue underlying much of these problems for CoLA is flat funding over the years. CoLA administrators, who are tasked among other things with improving graduate programs in the college feel they have come up with a reasonable solution to the problems of the college. CoLA administration feels they are losing qualified applicants because funding is not competitive with peer institutions, and so they have proposed to reduce the graduate student work force, in order to get “the best graduate students”. If they are serious about their concern for the precarious financial situation of graduate students, however, continuing the policies that graduate students entered their programs under is the best possible answer. The current situation is still sustainable, and problems with recruiting the “best graduate students” have to be weighed against the adverse side-effects of such a plan. And anyway, slightly more expensive packages do not necessarily result in better programs as the CoLA research paper suggests;

“Absent major success in fundraising for graduate students, this will mean a significantly smaller number of offers, an outcome that with time may run contrary to our goal of recruiting and supporting the very best applicants.” p. 18 [1]

The question that this issue should prompt everyone to ask is “why is the funding of CoLA declining?”. The Deans admit that the amount of tuition revenue brought in by CoLA is increasing and is likely to continue to increase. Although there has been some dips in state appropriations, overall the funds for UT Austin from the Available University Fund, Tuition and Student Fees and State Appropriations has been increasing at a rate of $15.95 million per year (adjusted for inflation to 2014) (see data and graphs in appendix). A recent article in The Dallas Morning News called “Oil boom sends gusher of cash to Texas Universities” (May 31, 2014) refers the growth of the Permanent University Fund and the concomitant increase in funding for the UT System, but apparently this money is not meant for us.

“ ‘It’s a huge game changer and is something that no other university system has to this extent,’ said James Huffines, a Dallas bank executive and University of Texas booster, who sat on the UT Board of Regents until 2010. ‘Just look around the campuses at all the new construction. A lot of it is supported by oil money, and those royalty payments should keep growing.’” [14]

Rather than acting as harbingers of austerity and work speed ups for graduate students, the Deans should be questioning why “we[!?] face diminishing resources” [2] in CoLA, while we are expected to bring in more funds for the University as a whole and while “Texas enjoys an enviable position in public higher education” due to its booming Permanent University Fund [14].

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[1] College of Liberal Arts, University of Texas at Austin. 2012. “Research Report”. October 2012. p. 8 for faculty, p. 17 for graduate students.

It is important to point out that the policy alleges to support 7 years of funding in some circumstances. One of these circumstances might be in cases of external funding. The administration has refused to simply grandfather in students who came in under a different calendar, however.

“Departments should design programs that can be completed in five years from entry into a doctoral program with a bachelor’s degree as the highest degree attained. If departments change the structure of the curriculum and examinations, articulate and monitor a reasonable scope and time frame for the dissertation project, design a careful mentoring process, and provide sufficient financial support to allow students to progress appropriately, a five-year doctorate ought to be achievable”. p. 15

[11] The MLA report is clear on this question. In a footnote it is stated

“Beginning in the mid- 1990s and continuing until 2008, the annual number of PhDs awarded in English hovered around 1,000, and in languages other than English around 600. Each of these numbers is about one- third lower than the high of 1973 for English (1,412) and 1974 for other languages (886). The number of national searches advertised—for all types of positions—has varied, but before 2008 the count was well above 1,500 positions in En glish and above 1,300 for other languages, both figures that compared positively with the number of new PhD holders. Yet it is crucial to remember that, as noted, these national searches involved all types of positions (e.g., term visiting positions) and by no means only tenure- track openings.” p. 20

State appropriations have declined in recent years, but overall they are flat. The following is inflation adjusted state appropriations from 1985 to 2014. State appropriations have declined approximately $500,000 a year, but this decline is not statistically significant (p=.549). Data were gathered from the Texas Legislative Library.

Tuition and fee revenue has increased 27.4 times faster than state appropriations, given the data available to me. Tuition and fees revenue has increased at an average rate of $15,435,000 per year. In the following chart the red is tuition and fees revenue, the blue is state appropriations.

The following charts the Available University Fund money that has been directed to UT Austin from 2004 until 2013. There has been an average increase of $8.55 million per year (p=0.000637).

Total public funds when all of these sources are combined show an increase in $15.95 million on average per year from 2004 until 2013.

The Nightly Texan will be writing on this issue shortly (in the next couple of days). Until then, please read the excellent response the graduate students of American Studies have given to CoLA’s “position paper”.

On June 4, the Office of Research and Graduate Studies of the College of Liberal Arts (COLA) released a statement briefly outlining its new policies regarding graduate student time-to-degree and doctoral student funding. It released this statement 36 days after Associate Dean Esther Raizen informed various COLA departments about these new policies via department-specific emails direct at department chairs and graduate advisers. It provides little-to-no new information and fails to clearly address the various problems American Studies graduate students have levied at it. In fact, it introduces several new problems, further evidence of the fact that the proposed policies are shortsighted, poorly considered, and ultimately untenable.

The Policy Publicly Summarized

In the new statement, COLA argues that it hopes to reduce graduate student time-to-degree to an average and median time of 6.5 years, .75 years less than the average time-to-degree between 1989 and 2013 and .5 years less than the…

KS: Regarding G.R. 14 (S) 12: Has this resolution been passed just within GSA or has it also been recognized by UT administrators?

AJT: The resolution was passed in the GSA April 30th of this year. I don’t know whether it has been or will be recognized by the administration. We’ve been hearing a lot from Mr. Hegarty about how Shared Services is supported by the UT campus community. I feel that if this is the case then resolutions should be passed in its favor by the Shared Governance bodies of the University.

KS: What is the current status of Shared Services implementation at UT-Austin? Will it still eliminate 500 jobs (and is this an exact number? It seems a bit round)?

AJT: The number given from the Accenture documents released in February following the faculty council resolution is 525. No methodology has ever been presented as to how that number was arrived at. As I understand it the savings from the plan are still predicated on those job cuts, so unless they adjust the savings downwards, they’ll still have to cut those positions. There has been some hand-waving about increases in efficiency due to shared services (and the ERP which it is often confused with) – but it hasn’t been made clear how these “efficiencies” save money.

I’m very skeptical about the $30-40 million savings they claim to achieve by the plan.. If one divides each of the numbers in the range by the jobs ($30-40 million/500 jobs) we arrive at cutting 500 jobs paying $60-80 thousand per year. Recent data released through FOIA request to the Texas State Employees Union on annual salaries and layoffs at the University of Texas demonstrate that the mean salary of administrative staff is $55,762 with a standard deviation of $78,405. If we assume outliers are above $120,000 and we remove them, the mean is $48,033 with a standard deviation of $24,077.

If we take the more reasonable mean of $48,033, the yearly savings are approximately $24 million with a standard deviation of $12 million. To achieve a $30-40 million in savings would require cutting approximately 625-833 positions, not 500, assuming the adjusted mean of $48,033.

But it is entirely possible that the Plan entails cutting 500 jobs that are between $12,000 and $32,000 above the mean yearly salary ($60,000-$80,000 respectively). What has to be explained is why the elimination of jobs will mostly effect positions ranging between 0.5 and 1.5 standard deviations above the mean. Suffice it to say that there is an extreme lack of clarity in how job cutting will achieve the desired savings. Until we see how they arrive at these numbers we’re not going to know much for sure.

KS: What are your main frustrations regarding the way it’s being implemented and handled by the administration?

AJT: Well, they paid Accenture $1 million to help gather data for the Committee on Business Productivity, which consisted of 13 “business leaders”, and spent another $3 million or so on consulting fees. The chair of that committee was Stephen Rohleder who had expressed the opinion that UT should have shared services two years prior to the release of that report, and his company was paid to do research to make the recommendation. Mr. Hegarty appeared at an Accenture sponsored summit that same summer speaking as if shared services was a done deal before any campus dialogue had happened. Despite Mr. Rohleder’s previously held opinion, the CFO considered the recommendation an “independent review” when he was queried about this at the GSA.

Plain and simple, the campus dialogue about the budget problems and the potential “need” to implement shared services should have started before all this money was spent on Accenture. The decision to buy Workday, which is intimately linked to the shared services plan should not have been made last summer. They made a huge amount of important and substantial financial decisions without consulting anyone. Well, now they’re paying for it and having to backtrack on a lot of their plans, but we won’t be able to get that $4.1 million back.

Its unclear to me why the data from the CBP had not been released immediately. I was shocked to hear for the first year or so that Mr. Hegarty was not interested in these data. As far as I understand the $4.1 million paid to Accenture was just a waste.

There’s endless amounts of frustration regarding the shifting definition of “shared services” the administration has used to make the plan seem more feasible, and the ambiguous role of Accenture has played throughout. There are numerous problems with the way the plan has been messaged that suggest a sophisticated and embattled PR campaign rather than honest campus dialogue.

KS: By how much will implementation costs exceed the $4 million already paid to Accenture, and do you believe Accenture has handled this money honestly?

There’s not really anyway to know exactly what Accenture did with this money. Research on campus “work functions” seems to have been conducted, but for some reason it was withheld from the public until February of this year. The other $3 million or so was spent on consulting fees, but no one knows what that bought us.

Mr. Hegarty has recently claimed that the shared services draft plan from October of 2013 was written up by Accenture, a shift from his previous position. (Just anecdotally, I suspected this was the case the entire time, the reason being that announcing job cuts publicly is something private sector companies do to increase their share prices, it makes no sense that a public institution would do this- so I suspected the announcing of the job cuts was a force of habit from Accenture consultants). If that’s the case, then, no-they have not handled the money honestly, because Accenture wrote a draft plan that purposely underrepresented costs to make shared services look more feasible, as is well known by now.

In terms of your question about implementation costs, again we don’t really know. I and David Villarreal wrote a white paper on the issue where we reviewed the literature on shared services and Enterprise Resource Planning. Both have been found to run a high risk of cost overrun. In the business literature, one of the noted disadvantages of shared services is the initial investment cost (its main disadvantage compared to outsourcing). But any situation, like we initially had with Accenture, where the consulting firm is the same as the implementation firm is a sure-fire formula for disaster, especially when it is not clear that the consulting firm has any incentive to budget accurately, and they benefit from cost overrun.

From the December Regents meeting, shared services was supposed to cost $54 million with another $11 million of “contingency”. The estimated cost has been reduced dramatically (last I heard it was $3 million), presumably because it looks like they may not have an off-campus shared services center. But this all might be a smoke screen, I mean unless we really probe for what the costs are (like we did for the $4.1 million), there could be all sorts of auxiliary costs that aren’t counted.

The ERP is the real big cost. ERPs are not typically designed for Universities and require constant “customizations” to meet the institutional needs of the “federated” University structure (our white paper has a literature review on this topic). When new customizations are installed trouble-shooting follows, increasing the amount of money paid to outside programmers and consultants.

KS: Also, what do you think of University statements claiming UT is in a bad financial situation?

AJT: There’s a lot to say about this- I’ll try to be brief. Shared services is not a one off issue for the administration. There has been a “crisis” for the past 25 years whether or not state funding has increased or declined. But the PUF has boomed in recent years to $15.6 billion recovering drastically since it was hit by the financial crisis, and the amount of money from the AUF going to UT Austin consequently shot up. State appropriations have not had a “sustained decline” for 25 years. State funding started to dip down after the financial crisis, but now its recovering. And tuition revenue has been accelerating even as there was a brief stall in in-state tuition increases. If you put together tuition revenue, the AUF (to UT Austin) and state appropriations there has been, on average ,an increase in funding of $15.96 million per year from 2003 to 2013 (and this isn’t counting donations and funds from overhead costs). The overall revenue has increased from $1.76 billion in 2007, to $2.34 billion now (All of these numbers are adjusted for inflation to FY 2014).

The “crisis” is the unsustainable growth rate that is fueled by debt financing. A big one is building projects. Since the financial crisis we have invested millions in the CLA, the SAC, the Medical School, the Callaway House etc… How does introducing shared services solve the issue of over-bloated administrative expenses? It doesn’t, in fact it makes it worse. As has been well-known for a while (see Robert Ovetz’ dissertation), by handing more discretionary funds to upper administrators, the debt problem will only be exacerbated. This explains why revenue and sources of discretionary funding have been increasing, but that there is a perpetual “crisis” in the eyes of the administration- a crisis that will exist regardless of whether state appropriations are declining or increasing, or how many donations we receive, how much tuition increases etc..

We might also consider the fact that upper administrative and director salaries have increased since the financial crisis of 2008. In 2007 (if we adjust salaries for inflation to 2014) there were 97 non-professorial employees at UT making over $200,000-that amounted to a sum of $25.8 million going to those individuals. After 2008 there has been a consistent trend of cutting down, and in particular cutting COLA. Not for upper administration though. In 2013, there were 122 administrators and directors making over $200,000 for a sum total of $44.5 million. As of 2013, if we capped salaries of non-professorial employees at $200,000, we would save $19.5 million a year indefinitely and “in perpetuity” as they say. Any such options are of course off the table- for political reasons though, not for practical ones.

KS: Hegarty says UT’s contract with Accenture ended in February. Does this actually mean anything, or is it merely misleading rhetoric?

AJT: Its hard to say. After the contract “ended” with Accenture in February, Accenture consultants stayed on the shared services project team. I understand from the last faculty council meeting that Mr. Hegarty also announced that we would have no external consultants for our new shared services plan. Maybe they’ve actually backed down, but they’ve been so reticent concerning the functions that Accenture has actually performed, its always hard to interpret things like these, and one suspects that its more about PR than reality. Keep in mind that the administration already plans on buying the ERP Workday. The purchasing of the license was approved by the Regents but I don’t know if its been bought yet. ERPs like Workday require external consultants. Accenture is one of the primary Workday providers. Its possible they could go with Deloitte, however, but this is something they have refused to announce. So that’s up in the air, it’ll take some really good investigative journalism to figure that one out.

On April 30th 2014, the Graduate Student Assembly passed a resolution on Shared Services at UT Austin,that asked that the plan *not* be implemented until resolutions in its favor had been passed in all legislative bodies on campus. The resolution can be viewed here.

The resolution was controversial splitting the house, but was passed 17 to 5, after numerous amendments and extended debate. The main argument concerned whether graduate students or any legislative body at the University had the “privilege” to give final vote or be involved in executive decision making at the University. Some students considered the resolution “arrogant” because it assumed that Shared Governance structures had (or should have?) such power. However, the authors of the resolution argued that if campus feedback is to mean anything it should mean that the stakeholders involved are actually convinced of the proposal. The proponents of the plan should have no trouble getting students, faculty and staff to pass resolutions in support of the plan if evidence demonstrates that it is a reasonable idea.

In 2011 the Tuition Policy Advisory Committee of UT Austin recommended increasing tuition for in-state and out-of state students. The increases were shot down by the regents in a bid to make the republicans look more populist than Powers. A few weeks ago an email was sent out by our “student leaders” explaining that the TPAC recommendations would now be implemented. Tuition would now increase, except graduate students would be excluded. According to the “student leaders” the original TPAC recommendation was “supported by students”, but a 2011 referendum found that 64% of the student body was against the tuition increase [1]. Furthermore there is “no time” to have any formal process of feedback with the campus. Only a few student legislative body meetings will be used for town hall meetings before the recommendations are due.

There are a lot of issues to be discussed in relation to tuition and the budget, but in this article I comment on only one aspect of their argument which I viewed as extremely flawed. It is commonly stated that the amount of state appropriations that cover UT Austin’s total budget has shrunk dramatically over the years. A UT Austin website called “Budget 101” states that “In the 1984-85 fiscal year, the State of Texas provided 47 percent of the university’s total budget. For the 2010-11 fiscal year it has dropped to 14 percent.” [2] The TPAC committee is fond of presenting graphs such as the following which “demonstrate” the necessity to increase tuition.

The following graph was presented in 2011 with the caption “Tuition Increases have not fully offset declines in State General Revenue; efficiency improvements, administrative and programmatic reductions and other revenue enhancements have made up the difference.” This idea is intuitively convincing in that there were fairly large declines in the 2011-2012 biennial for state appropriations. However there is a severe problem with arguing that because state appropriations have declined as a percentage of overall revenue tuition needs to be increased to off-set that cost. First, the decline in percentage is partly (actually mostly) due to increases in overall revenue rather than a lack of state funding. In 1999 the overall revenue for UT Austin was $1.36 billion dollars (adjusted for inflation to 2014), while in 2014 it is $2.35 billion dollars [3,4].

In fact if nothing else changed except tuition increased then we would expect the percentage coming from state appropriations in relation to overall revenue to decrease because increased tuition increases overall revenue. The TPAC argument is not only dishonest but viciously circular.

A more obvious way of comparing the relationship between state appropriations and tuition is by considering the real dollar numbers (adjusted for inflation) over time. The first thing one notices when one takes this perspective is that while state appropriations have decreased in recent years, they fluctuate over time in ways that suggest that they could increase again. According to Mr. Hegarty in an interview with the Daily Texan

“But they’re working on five-year forecasts under some very specific assumptions: One, that their revenues for the next five years that they have to spend are, at best case, flat. Why? You can’t deny 26 years of funding trends in funding from the state. Funding’s actually declining, not growing.” [5]

There has been a decrease in recent years, however, this statement is questionable at best. The following chart graphs inflation adjusted state appropriations over time (1986-2015). (Data are from the legislative appropriation bills available online [6]).

What these data demonstrate is that state appropriations were increasing overall from approximately 1992 until approximately 2005, but even then they only went down to 1996-1997 levels before the financial crisis. It is hard to detect strong trends because of the huge amount of fluctuations. Although there is a decline based a shortfall in appropriations in 2011 and 2012, the number has started to increase again. Furthermore, a decline is to be expected given the onset of the financial crisis in 2008-2009. According to a Grapevine survey of state appropriations in higher education 31 states increased appropriations a few years after the financial crisis. According to James Palmer, professor of higher education at Illinois state university; “Historically there have been ups and downs in state funding. The Great Recession created a huge trough, but barring further or unexpected declines, I think we’re beginning to climb out of the trough, at least at a national level” [7, 8]. For example, in 1988 it seems there was a massive decline to $267 million (inflation adjusted to 2014). However in the coming years increases followed. The CFO is extrapolating based on too little data.

The argument of TPAC is that declines in state appropriations justify tuition increases. Tuition should compensate for a shortfall in state revenue. This argument is rendered problematic when one compares inflation adjusted tuition in relation to inflation adjusted state appropriations overtime for more than a few years [9]. The following graph charts growth in tuition revenue (red) and growth in state appropriations (blue).

The CFO is not lying when he states that state revenues have decreased overall in the years, however the slope is extremely shallow and difficult to extrapolate from because of the high degree of fluctuation. A regression analysis shows that the decline in state revenue is not even statistically significant (p= 0.549).

Taking the CFO’s argument for granted, we find that state appropriations have decreased $564,000 on average each year. Here’s the problem with the tuition based argument. From the data, tuition and fee revenue has increased by an average of $15,435,000 a year. Tuition revenue has increased 27.4 times faster than state appropriations have decreased [10].

If one wanted to make an honest argument about the relation of state appropriations to tuition and fee revenue, one would also argue that when state appropriations increase, tuition should also decrease, but this has never happened. Historically, every fluctuation downward of state appropriations have been used to justify tuition increases, but the converse is never true [11].

Given the actual trends, the real question is not how do we recover state appropriations through tuition, but rather; Why does revenue need to constantly increase far above inflation? And why are these costs pushed onto students? If one is actually interested in lobbying for state funding, at the end of the day the party to convince is the tax payer. But an administrator that advocates tuition increases at every turn, thus making University less accessible to the public, is shooting himself in the foot if he is interested in acquiring more state funding, which will ultimately involve convincing the public.

[10] To a certain extent the increase in tuition revenue can be associated with an increase in enrollment. But not by very much. In 1988 enrollment was 50,107 students, while in 2003 it was 50,616. In fall 2013 the number was 52,059 (a decline from 2012). A more rigorous study would weight tuition increases in relation to enrollment, in addition to charting cost of living increases and other possible expenses.

Andrew Clark, the senate of college councils president, recently wrote an op-ed arguing that the debate on shared services has been “one-sided”. Clark makes the obvious point that a discussion of shared services should be “informed” [1]. Ironically, in spite of his argument, Clark’s article is riddled with factual inaccuracies and blatant mischaracterizations of the arguments from people who have raised concerns about the plan- a group of people Clark derides as “detractors”, without qualification.

Where is the evidence?

A case in point is the issue on the data for the Shared Services plan. Clark argues that the “detractors” are wrong to demand that the administration give data supporting the plan, because the data have not yet been produced, the whole point of the now in progress pilots. This mischaracterizes the position of the “detractors”. What has been demanded for the past year is the data referenced on page 19 of the Smarter Systems report from 2013 that were used in support of a Shared Services model by the Committee on Business Productivity [2]. This is completely separate from the data on the Shared Services that is supposed to be produced from the pilots. In the former case the data have been available, in contrast to what Clark states, they just had not been released to the public until a few weeks ago.

The data are now being analyzed by concerned students, faculty and staff. According to Mr. Hegarty, the actual data backing up the recommendation were of no concern to him. On October 30th he stated “I didn’t want the committee’s information, the committee didn’t offer it and we didn’t want it.” [3] He was asked the same question at the Graduate Student Assembly the same day and maintained that the administration had no interest in the data backing up the Shared Services recommendation [4]. In other words, they had no interest in assessing whether the CBP’s argument for Shared Services followed in any way from the data they gathered. The recommendation was accepted uncritically.

Clark’s narrative on Shared Services

Clark then constructs a paragraph long narrative on Shared Services in which nearly every sentence is false. He claims;

“Using professional expertise and information on UT, they made the determination that the University could save up to $30 million annually by centralizing operations like human resources, payroll, IT and procurement. Vice President and Chief Financial Officer Kevin Hegarty then assembled multiple committees made up of UT staff and faculty to examine the claim and verify its validity.”

This last sentence is completely false. The committees were not made to assess the claims of the Smarter Systems report regarding Shared Services. In fact the data from this report had not even been released. Even the cash-flow charts from the October Shared Services plan had not been produced when the aforementioned campus based committees were meeting. These were simply superficial information sessions, the primary purpose of which was to argue that Shared Services was not a form of “outsourcing”. Clark seems to have not even bothered interviewing a single staff, student or faculty member who went to the meetings he discusses (I was one). In fact the committee members were the same people who Clark derides for asking that data from the CBP on Shared Services be released. Clark then absurdly claims;

“It was determined that the figures were accurate, and so Hegarty spent the better part of the fall semester attending meetings and hosting town hall forums to engage as many people as possible on the project and solicit feedback from the campus.”

This statement is incorrect on multiple levels. Which “figures” were determined to be accurate? When these committees were meeting there were no “figures”, let alone the Accenture data to even back up the Shared Services plan. When the basic figures were released in the October 30th report it was found that the numbers from the cash-flow chart were off by $80 million and assumed that 423 staff members magically disappeared by December 2014. When the actual investment cost is put in the Shared Services plan does not apparently break even until year 10, if then. Graphs comparing the cash-flow chart from the October 30th plan and the adjusted cash-flow chart based on real investment are presented below [5, 6].

Clark then states;

“The data people seek is [sic] forthcoming, but it will not be here until units such as the College of Liberal Arts and the McCombs School of Business, both of which are part of a pilot Shared Services program designed to see how much the model could actually save, have completed their trial runs of the program.”

But Shared Services is not supposed to save anything until year 10, and that’s when its implemented at a campus-wide level. Clark’s statement is barely even coherent. The goal of Shared Services cannot just be to save money, it should be to save money in relation to the services provided, an issue that Clark does not even address (we could save a lot of money by eliminating the University of Texas). Furthermore, claiming that the sharing of employees between faculties in COLA and McCombs is anything like the massive over-haul that is recommended by the Committee on Business Productivity, with an off-campus call center, drastically reduced staff and the loss of department specific knowledge on a mass scale is a questionable position to say the least. That said, critical assessment of the Shared Services plan requires that the administration detail what evidence would actually cause them to not implement Shared Services after data have been gathered from the pilot. Until then the pilot is testing nothing.

Clark, who never attended a single town hall meeting or campus based committee on Shared Services, then concludes from his completely fabricated history that “The process has been reasoned, public and cautious.” I remind the reader at this point that the Committee on Business Productivity was composed of 13 business leaders, not a single one with teaching or research experience. Accenture was paid consulting fees up to $4.1 million to help produce the draft plan with obviously incorrect profit projections [7]. The Shared Services project team was composed mostly of Accenture consultants and not a single student or professor or non-managerial staff member. This committee decided to buy the ERP Workday during the summer of 2013 with no one around and no campus dialogue. At the second town hall meeting on November 13th Mr. Hegarty refused to allow follow up questions- all questions had to be submitted on a piece of paper beforehand and vetted. When an open question period was allowed there was not a single positive comment concerning Shared Services from the audience which included students, faculty and staff.

“Don’t throw the baby out with the bath-water” (Accenture=baby)

Clark argues that the critique of Accenture’s involvement is misguided. He argues that

“Just because some of Accenture’s employees may have made mistakes in the past does not mean the entire company is full of people who cannot be trusted to deliver on their contract.”

The issue is not that the company made some “mistakes”, but rather their poor performance in the public sector is almost systematic. When Accenture tanked food-stamp procurement in Texas, costing tax-payers $243 million, leaving 81,504 people (including children) uninsured and resulting in a five year backlog in the processing of food stamps [8] their profit margins did not suffer significantly. From the perspective of the company the botching of the food stamps was not a mistake, because there was no clear structure of accountability built into the plan. The actual worry is that UT’s intimate relationship with Accenture (head of IT Brad Englert, a former Accenture COO is on the project for one example), dramatically reduces the ability of UT administrators to act independently and in the best interest of the University. Systems of accountability both for Accenture and for UT central administration have not been spelt out, and the company was granted two contracts with the University without competitive bidding. The fact that Accenture helped draw up a plan that underrepresents costs in the order of $60-80 million should cause particular concern. Continued cost overrun in the public sector is endemic when public officials do not scrutinize claims made by consultants on the private sector [9].

Shared Services and the Cult of Efficiency

Clark then argues in favor of Shared Services by pointing out that it has been applied at other Universities. He argues that is has been implemented “[b]ecause it increases efficiency and thus lowers overall costs.” A noncontroversial definition of efficiency would be the quality of some service in relation to the cost. Efficiency is not necessarily increased through cost-cutting if the quality of service declines as well. Administrative staff at UT perform a number of non-identical and department specific functions. It is entirely possible that one of these services is adversely affected by Shared Services while another is not or one department is affected more than another. The Shared Services issue is not just a narrow question about saving money but touches on questions about the functions of a public institution of Higher Education. An assessment of University wide efficiency implicitly involves a weighting of the these different functions. Close attention needs to be paid to how efficiency is actually measured rather than narrowly focusing on how much money is saved. Questions such as “efficiency of what?, efficiency for whom?” need to be assessed [10].

To a certain extent we can assess the efficiency of Shared Services at the institutions that Clark mentions. While at both Berkeley and Yale there was a significant amount of disapproval of the plan, Michigan is the most important case since according to Hegarty “They’re probably the closest institution to us of any out there. They’re about the same size, the same scope, everything. And so we think: That’s really a good test case to look at, watch and monitor …. They look very, very much like we look when you look at how they’re organized” [11].

At Michigan faculty have complained that Shared Services dramatically decreased efficiency resulting in increased administrative work for faculty. The faculty council passed a resolution against the plan charging the following

“1. Reduction in faculty productivity by 10-20%.
2. Less faculty access to students and diminished quality of teaching for undergraduate students and supervision for grad students.
3.Loss of research funding to the tune of several tens of millions of dollars.
4. Increased frustration and consternation by the faculty because a significant fraction of their effort is diverted into secretarial-like tasks.
5. No cost savings; on the contrary, a great deal of loss in revenue.
6. Dehumanization of some 300 staff members.” [12]

The implementation of Shared Services at the University of Michigan was so controversial that the leader of the project and CFO, Rowan Miranda, had to step down as the leader of the Shared Services initiative [13]. A month later, the Michigan Daily reports that Miranda left his job at the University of Michigan [14].

At Michigan, Shared Services was predicated on cutting 50 jobs. The plan at UT is based on downsizing to an unprecedented degree, ten times as much as Michigan (with the elimination of 500 jobs) with a huge investment cost of at least $160 million. Any argument about “efficiency” needs to take into account the global consequences of such a plan, rather than hand waving about the amount of money saved through cuts.

“The University’s hard-working staff”

The most disingenuous argument that Clark makes is about the need for the implementation of Shared Services to be run by “the University’s hard-working staff members”. He derides the Texas State Employees Union “orchestrated” protest against Accenture’s involvement as an example of the “one-sided dialogue”. TSEU is composed partly of staff workers who have bravely been speaking out against the plan. Clark’s entire article is dismissive of these people. At a minimum he should have pointed out that there are disagreements between staff.

The comment is not just disingenuous because of the fact that it brushes over real conflict, it is also completely at odds with what is required of a Shared Services plan. In a section titled “Don’t Forget the Lawyers”, Bergeron in his book, Essentials of Shared Services explains

“Given the likely resistance to the shared services model by some employees, the Human Resources and Legal Services divisions of the corporation are likely to be hard hit with new work especially initially” [15]

Bergeron goes on to clearly articulate the attitude that management must have towards its employees in the implementation of Shared Services;

“As virtual pawns in the shared services implementation game, employees of both the parent corporation and those on the payroll of the shared business unit typically experience a high degree of volatility. This upheaval in normal operations is greatest early on, when employees associated with the back-end services are destined to be moved to a shared business unit and either downsized or retained in a new highly competitive environment.” [16].

Clark points out that “most” of the downsizing will be due to “natural attrition”, which implies that some percentage will be laid off (he has no idea how much). He believes that Shared Services will save jobs, but is unable to articulate why. Staff who raise concerns about the plan risk being terminated and Clark’s patronizing attitude does nothing to address the concerns of those staff he derides as “detractors”.

One-sidedness?

In addition to writing a breathtaking amount of falsehoods in his article Clark argues that the dialogue on Shared Services has been “one-sided”. Why? Because some people disagree with the administration. We should stop using “charged rhetoric” about “data and Accenture”, and engage in “informed discussion”. One wonders how informed discussion is supposed to take place without data, and when “student leaders” such as Clark refuse to do basic homework on the issue. Clark mysteriously does not cite any of his sources so it is unclear where he got his story on Shared Services from …. but I have a pretty good guess.

[10] A detailed critique of notions of efficiency used in higher education can be found in Welch, A. R. 1999. “The Cult of Efficiency in Education: Comparative reflections on the reality and rhetoric.” Comparative Education 11:47.

Enterprise Resource Planning (ERP) refers to a business management software. One of the primary characteristics of the software, compared to legacy technology, is application integration. The integration of various transactional applications is said to increase efficiency through reduced procurement costs, smaller inventories, lower administration costs and reduced labor costs generally. ERPs are an outgrowth of business material/manufacturing resource planning (MRP)that began being used in the manufacturing in the 1960s in order to solve and automate complex computations involved in production (e.g. the quantities and types of materials necessary to meet a production program) [1].

ERPs are designed to be highly standardized in order to accommodate the particularities of institutions. The inbuilt options that make the ERP operate differently from its original design are referred to as “customizations”. Customizations are added before or during the implementation phase of the ERP and are one of the primary costs associated with ERP implementation [2].

There is no inherent link between an ERP and a given business model in the abstract (such as Shared Services). A given institution’s rules must be programmed into an ERP system, however, which implies a detailed understanding of the organizational structure of that institution [1]. An alternative to proliferating customizations is organizational change, so that the institution adapts to the ERP (called a “vanilla” solution by Peoplesoft) [2].

There are three main costs associated with ERP implementation. A small part of costs are from the licensing fee. A larger portion of the cost is from service and support of programmers. Generally the more customizations that are required the more programmers will charge [2]. The other important cost come from consulting fees. Kurbel explains that the reason consultants are necessary is because most firms, which change management software every 10-20 years, do not have the requisite software expertise on hand in order to properly implement the ERP. This has a downside;

“…the company becomes dependent upon the external consultants, who do not necessarily have the same goals as the company. Wu and Cao quote an information manager who stated that consultants are primarily interested in finishing an implementation project as quickly as possible. The company, however, is interested in obtaining the best possible solution. Because the consultants only present the option they decided upon, the company is often not aware of other possible alternatives.” [1; 159, 3]

The situation has been documented in a study on ERP implementation by Grant et al. [2].Grant et al. compared ERP implementation in three institutions; FoodCo, Bankco and OzUni. The study concludes based on investigation into the three cases “that ERPs do not produce the beneficial organisational outcomes which vendors and consultants claim” [2; 21]. The University in their study (referred to as OzUni) rejected Peoplesoft’s ERP recommendation and built an in-house solution. The consultants argued that an in-house solution would be costly, but the Deputy Director of OzUni was not convinced, since probing the issue further revealed that the Peoplesoft solution would be incredibly expensive due to the amount of customization necessary. Administrative and academic representatives of OzUni pointed out;

“that the nature of the ERP business is such that to have sold PeopleSoft Students to OzUni would have involved a lucrative long-term contract for the consultants in conjunction with PeopleSoft to provide regular service releases and implement further customizations and upgrades as necessary” [2;21]

According to the study four years after building an inhouse ERP, “after a series of internal reviews into its performance, [OzUni] claims to be very satisfied with the way its operating.”

In stark contrast to OzUni, UT Austin is relying on an external provider (Workday), has already paid 30,000,000$ for the licensing fee, never considered an in-house solution, has embraced the organizational change advocated by the management and consulting firm, Accenture, to which they have already paid approximately 4,000,000$ in consulting fees. Part of these consulting fees included over 1,000,000$ for a study to be conducted by the same company [4], and the CFO, Mr. Hegarty had such blind-faith in the company that he never asked them to back up their Shared Services-ERP recommendations with the data Accenture claims to have gathered.

The plan has already been incredibly costly, and if the literature on ERPs is any guide, this is just the beginning. Transparency into UT administration financial decisions and conversations with external providers and consultants together with frank discussion of available alternatives is extremely important. An in-house ERP should not be off the table,it may be the most appropriate and cheapest option for UT.